Dogecoin (DOGE) is a cryptocurrency that came into existence in 2013, based on comedic inspiration rather than a particularly strong need to fulfill a use case. The cryptocurrency was inspired by the “Doge” meme, which shows a picture of a Shiba Inu — a Japanese dog breed — sitting with its paws folded. Text overlays the image of the dog with phrases touting nonsensical grammar.
Dogecoin got its inspiration from the humorous and eccentric culture in the cryptocurrency community, which first began to form in 2009 with the launch of Bitcoin (BTC). Following Bitcoin — a blockchain-based asset capable of moving and storing value — came thousands of other crypto assets touting other benefits, such as added privacy, real-world asset tokenization, art tokenization and more.
Bitcoin’s code is open-source, which other projects have used to create separate crypto assets and blockchains. After Litecoin (LTC) and, subsequently, Luckycoin (LKY) were created based on Bitcoin’s code, software engineers Billy Markus and Jackson Palmer used the code of Luckycoin to form Dogecoin, taking only hours to complete.
Palmer and Markus departed from the Dogecoin project in 2014. Markus sold his stack of Dogecoin in 2015 and used it all to purchase a used Honda Civic.
Fundamentals of DOGE
Dogecoin rewards 10,000 DOGE to successful miners. The block rewards for Dogecoin were initially set at one million DOGE each. However, developers of the cryptocurrency introduced a halving mechanism that reduces block rewards in half every 100,000 blocks. Dogecoin stopped using this halving method in January 2015 and continues to pay out 10,000 DOGE per block.
On the technical side, Dogecoin has seen continued updates over the years, which have been publicized on the asset’s GitHub page. Aside from its development, Dogecoin’s fees remain a selling point for the asset. Since Jan. 2021, the average transaction fee for Dogecoin has been around $0.44. At one point in May 2021, the average Dogecoin transaction fee cost approximately $2.52 — a peak in terms of previous and subsequent levels. Dogecoin’s fees are considered low compared to the transaction fees of other crypto assets.
While DOGE has an unlimited supply, its inflationary nature could still lead to price fluctuations in the future. Dogecoin’s inflationary model continuously adds to the circulating supply, potentially affecting its long-term value.
In addition, a small concentration of just 533 Dogecoin wallet addresses owns over 80% of the entire DOGE supply as of March 25, 2024, which means large transactions by these holders have the potential to influence prices.
Dogecoin use cases
Dogecoin has had a committed community for years, and fans following the asset propelled its price to towering heights in 2021. The coin itself, however, does not hold any notable features that suggest it might take over as the world’s dominant currency or store of value.
Why can’t Dogecoin become a mainstream currency? Dogecoin’s supply perhaps serves as the main reason. The coin comes with no limit on its maximum supply. On a daily basis, around 14 million additional Dogecoin are mined, which has an inflationary effect on the asset’s value. In contrast, Bitcoin has a fixed 21 million maximum supply, making it a deflationary and scarce asset.
Dogecoin, however, can potentially serve as a form of currency for tipping or payments, online or otherwise. Its price in United States dollars is comparatively much lower per unit than other crypto assets, such as BTC, allowing users to work with whole numbers rather than transact in fractions of BTC. Dogecoin’s low unit price makes it a potentially attractive option for smaller, everyday transactions.
The coin’s community has also had success marketing the memecoin to a mainstream audience. On the other hand, Dogecoin, like many cryptocurrencies, faces uncertainty. Its long-term viability depends on its ability to sustain community interest and develop real-world use cases beyond its current popularity.
Dogecoin’s technical makeup puts the asset ahead of Bitcoin in terms of transaction speeds. Dogecoin features a block confirmation time of just one minute, compared to Bitcoin’s 10 minutes per block. Therefore, although each block on Dogecoin’s and Bitcoin’s respective blockchains is one megabyte in size, Dogecoin’s blockchain generates more blocks in the same amount of time. Bitcoin’s slower transaction speed has been mentioned in the past, although, over the years, Bitcoin has come to be seen more as a store-of-value asset.
Price history of Dogecoin
Since its inception in 2013 until December 2020, Dogecoin typically traded for less than $0.01 per coin. In early 2018, Dogecoin’s price hit approximately $0.018, falling below the one-cent level in the months and years that followed.
In early January 2021, Dogecoin’s price popped back above the $0.01 mark for a short period. Moreover, the asset yielded a major price rally in late January, when Dogecoin surged to about $0.07 per coin in two daily candles or a 48-hour timeframe.
A number of days later, the asset was around $0.088 per coin. After a decline down to the $0.04 range, the coin’s price consolidated for weeks, leading to its rapid upward price run.
In May 2021, Dogecoin traded at a price just shy of $0.74. This dramatic price rise was primarily driven by the hype around the asset and the asset’s community of interested participants. After August 2021, Dogecoin kept more or less falling until June 2022 and then steadied until Oct 2023 before taking a higher trajectory. In the first quarter of 2024, Dogecoin was trading at $0.15.
Dogecoin community and hype
In 2020, viral videos on TikTok pushed up the price of Dogecoin by 35% and volume by 2,000%. Dogecoin attracted significantly more interest in 2021, including attention from a member of the Reddit-based group r/WallStreetBets, which is known for its impact on the price of GameStop stock in early 2021.
Around the time of the GameStop stock price surge in January 2021, a Twitter (now known as X) user named “WSB Chairman” posted a tweet, pondering if Dogecoin had ever summited the $1 price point. Dogecoin’s price rose to roughly $0.07 following the tweet.
Dogecoin-related tweets posted by Tesla CEO Elon Musk also played a role in the popularity of Dogecoin in 2021. Tweets ranged from comments on the coin’s development to a picture of Rafiki holding up Simba (from the movie The Lion King), with Musk’s head pasted on Rafiki’s body and the head of the Doge dog pasted on Simba’s body.
Multiple social media platforms, including Reddit, serve as hotbeds for Dogecoin discussion. During its 2021 bonanza, Dogecoin-related searches flooded Google, Twitter hosted a significant amount of chatter related to the asset, and mainstream media gave the digital asset air time. Single-day trading volume for Dogecoin also rose past that of Bitcoin on at least one occasion in 2021, with billions of dollars worth of the coin traded.
The years following Dogecoin’s inception proved eventful, with tales of hacks, Dogecoin-painted racing vehicles and more. One popular story revealed how donations via Dogecoin helped fund Jamaica’s national bobsled team for its 2014 Winter Olympics run.
How to buy, sell and spend DOGE
How to buy and sell DOGE
Buying and selling Dogecoin is like trading most other big-name crypto assets. There are several cryptocurrency exchanges where users can buy or sell the dog-themed coin, including several exchanges available in the United States.
Buying DOGE on a crypto exchange requires transferring fiat currency (U.S. dollars, euros etc.), stablecoins or other crypto assets to a crypto exchange and then buying the coin with those funds. Users can also sell DOGE and send cash or crypto off the exchange. Additionally, interested parties can also buy or sell DOGE peer-to-peer (P2P). Buying and selling Dogecoin is similar to buying and selling Bitcoin and other cryptocurrencies.
Related: How to buy Bitcoin: A step-by-step guide
How to store DOGE
Users can hold DOGE on the crypto exchange where they purchased the asset, although this method gives owners less control over their funds.
Dogecoin holders can also store their coins in a personal, self-hosted wallet. These wallets provide better security and privacy and require users to take responsibility for their crypto assets, allowing them to self-custody them off third-party exchanges. Hardware and local wallets are two potential options. However, a user’s wallet of choice must be capable of holding Dogecoin. To store DOGE in their self-hosted wallet, users must send their holdings from the exchange to their wallet address.
Where to spend DOGE
How can a holder spend their DOGE? One option is to send it to a crypto exchange, sell it, and cash out or transfer the money gained from the sale. Users can also sell their DOGE for fiat while uploading it to their crypto card and, in a way, spend proceeds from Dogecoin. In the U.S., the Dallas Mavericks of the National Basketball Association opened the door to payments via Dogecoin for merchandise and tickets in 2021.
Are memecoins a good investment?
Memecoins, such as Dogecoin and Shiba Inu (SHIB), have seen dramatic price swings, mostly due to conjecture and hype on social media rather than solid use cases or underlying value. They are regarded as high-risk investments with considerable upside and downside potential.
Although some investors have benefited from their volatility, memecoins frequently don’t have long-term viability or real-world utility. It’s important to remember that cryptocurrencies are volatile by nature, and investing in memecoins carries even higher levels of risk due to their unpredictable nature.
The future of Dogecoin
The future of Dogecoin is unclear, with both opportunities and challenges ahead. Its ongoing popularity — fueled by a fervent community and sporadic endorsements from prominent figures — may result in price volatility and increased mainstream acceptability.
Its reliance on hype, inflationary nature and lack of technological advancement compared to other cryptocurrencies threaten its long-term viability. Dogecoin’s future course will be determined by factors such as user support, cryptocurrency market sentiment and how useful it will become over time. While it defies traditional expectations, predicting its future with certainty is impossible.